06:25 AM EST, 12/23/2024 (MT Newswires) -- News Corp. ( NWSA ) shares increased early Monday after the company agreed to sell its 65% majority stake in Australian sports and entertainment streaming service provider Foxtel Group to DAZN Group, as part of efforts to simply its structure and optimize its portfolio.

The transaction values Foxtel at 3.4 billion Australian dollars ($2.13 billion), News Corp. ( NWSA ) said in a Sunday statement. Under the terms, shareholder loans worth A$578 million owed to the media and information services company will be repaid in cash while Foxtel's current debt will be refinanced at completion, according to News Corp. ( NWSA )

Telstra Group, which owns a 35% stake in Foxtel, also agreed to sell its entire holding in the company and get A$128 million in cash for the repayment of shareholder loans. In a separate statement, the company said it doesn't expect the deal to have a material impact on its fiscal 2025 guidance.

The transaction, which requires approval from regulators, is expected to complete in the second half of fiscal 2025. News Corp.'s ( NWSA ) stock rose 3.3% in premarket activity.

As part of the deal, News Corp. ( NWSA ) will receive a 6% equity interest in sports platform DAZN and get one seat on its board of directors, while Telstra will take a roughly 3%. "We believe DAZN is the right owner to take the business to the next level with their technological capabilities, global footprint and compelling sports rights," News Corp. ( NWSA ) Chief Executive Robert Thomson said.

The divestment will let News Corp. ( NWSA ) focus on its key growth segments, such as Dow Jones, which includes The Wall Street Journal, it said. News Corp. ( NWSA ) also owns HarperCollins book publishing and online real-estate firm Realtor.com. The sale will also allow News Corp. ( NWSA ) to benefit from the repayments of shareholder loans and an improved credit profile, according to Thomson.

DAZN's financial backing is expected to enhance Foxtel's strategy, provide access to its global reach and accelerate its transformation with improved infrastructure and technology, Foxtel CEO Patrick Delany said.

"Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN to enter a key market," DAZN CEO Shay Segev said. "We are committed to supporting and investing in Foxtel's television and streaming services, across both sports and entertainment."